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Mortgage Lending Slid to 16-Year Low in 2011

By cc0   Follow   Tue, 18 Sep 2012, 11:38am   2,734 views   47 comments
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http://online.wsj.com/article/SB10000872396390443995604578004231728567010.html

If loans and refis are dropping, what kind of MBSes do you suppose the FedRes will be buying into 2015?

Mortgage lending continued to drop off last year in the U.S., falling to a 16-year low as the housing market struggled to recover and refinancing activity slowed, U.S. regulators said Tuesday. The number of home loans issued tumbled 10% in 2011 to 7.1 million, the lowest level reported under the Home Mortgage Disclosure Act since 1995. Mortgages for purchasing a home fell about 5%, while refinancings contracted by 13% despite a pickup late in the year as 30-year mortgage rates fell to around 4%. The Federal Reserve, which compiled the data along with several other regulators, said one factor weighing...

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1. Raw Follow Befriend 10 threads 694 comments

   8   1:28pm Tue 18 Sep 2012   Share   Quote   Permalink   Like   Dislike   Goran_K says Raw says You did not even read the article did you? You are afraid to face the truth. Please note that the NAHB/Wells index comes from a builder survey that tabulates “a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.” So, the West isn’t yet cured from the long housing drought, but the survey indicates local builders see opportunity for new home sales. It's a survey of opinion, not actual housing starts. The index almost reached the same level in 2011, did home building skyrocket? Exactly. There would be a lag period between being confident and actually building. Confidence come first. Now wait for the avalanche of homes being built.

2. Raw Follow Befriend 10 threads 694 comments

   9   1:41pm Tue 18 Sep 2012   Share   Quote   Permalink   Like   Dislike   Darrell In Phoenix says We need MORE inventory. BUILD BUILD BUILD Build Baby Build. We need more jobs, more wealth, more prosperity. What a great country we live in.

3. zesta Follow Befriend 1 threads 203 comments

   10   1:45pm Tue 18 Sep 2012   Share   Quote   Permalink   Like   Dislike   This is data from 2011, 2012 data will be higher. Does it matter though? Is sales volume an indicator of which way prices will go? At our current pace (4m resale homes / year) volume is still higher than any year of the 1980s boom. Volume looks low now because sales volume during the 2000s were off the charts.

4. zesta Follow Befriend 1 threads 203 comments

   11   1:52pm Tue 18 Sep 2012   Share   Quote   Permalink   Like   Dislike   2012 lower than 2011? Do you have a link to back that up?

5. Call it Crazy Follow Befriend 229 threads 2,777 comments

   12   2:03pm Tue 18 Sep 2012   Share   Quote   Permalink   Like   Dislike   cc0 says If loans and refis are dropping, what kind of MBSes do you suppose the FedRes will be buying into 2015? Don't worry, just read that the mortgage companies are re-reving up Liar loans again... Welcome back sub-prime!!! Also, only 20% of mortgage apps are for purchases.... 80% are refi's... There should be plenty of crap loans the Fed will be able to buy..

6. Goran_K Follow Befriend (4) 25 threads 1,518 comments Laguna Beach, CA Premium

   13   2:03pm Tue 18 Sep 2012   Share   Quote   Permalink   Like   Dislike   Protected   zesta says This is data from 2011, 2012 data will be higher. Does it matter though? Is sales volume an indicator of which way prices will go? At our current pace (4m resale homes / year) volume is still higher than any year of the 1980s boom. Volume looks low now because sales volume during the 2000s were off the charts. Naturally as population increases, the number of homes selling should steadily rise as builders build each year, and new people try become home owners. So one would expect that homes trading in the market today in 2012 would naturally be at a higher level in nominal terms than 1982. What is really interesting about Darrel's data is that not only has the amount of mortgages actually decreased in absolute terms, the amount of purchase mortgages per year have decreased to mid 1990s levels, when they should be higher. This shows that the market has actually retracted despite there being nearly a 40,000,000+ population change since 1995.

7. zesta Follow Befriend 1 threads 203 comments

   14   2:05pm Tue 18 Sep 2012   Share   Quote   Permalink   Like   Dislike   Darrell In Phoenix says 2012 is higher than 1997? Do you have a link to back that up? You've been repeating the same thing over and over and you can't support it?

8. zesta Follow Befriend 1 threads 203 comments

   15   2:12pm Tue 18 Sep 2012   Share   Quote   Permalink   Like   Dislike   Goran_K says Naturally as population increases, the number of homes selling should steadily rise as builders build each year, and new people try become home owners. So one would expect that homes trading in the market today in 2012 would naturally be at a higher level in nominal terms than 1982. Okaay... If we had 3 million re-sales in 1995 what would be a healthy number of re-sales for 2012?

9. zesta Follow Befriend 1 threads 203 comments

   16   2:12pm Tue 18 Sep 2012   Share   Quote   Permalink   Like   Dislike   Darrell In Phoenix says zesta says Darrell In Phoenix says 2012 is higher than 1997? Do you have a link to back that up? You've been repeating the same thing over and over and you can't support it? Why bother when it it's true? Thank you for posting it. 2010/2011 looks quite a bit lower than 2012? Maybe you should change your slogan to: Housing demand was exceptionally low in 2010! SELL SELL SELL!!

10. Goran_K Follow Befriend (4) 25 threads 1,518 comments Laguna Beach, CA Premium

    17   2:22pm Tue 18 Sep 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   zesta says Okaay... If we had 3 million re-sales in 1995 what would be a healthy number of re-sales for 2012? Well if you look at this chart, you could trend a line from 1995 (ignoring the free credit bubble): Any line you draw would certainly be higher than 4,000,000.

11. zesta Follow Befriend 1 threads 203 comments

    18   2:28pm Tue 18 Sep 2012   Share   Quote   Permalink   Like   Dislike   Goran_K says Well if you look at this chart, you could trend a line from 1995 (ignoring the free credit bubble): Sure, I can agree with that. Though the graph stretched out to the 80s is better to draw a trend line, right? Now if you believed that the volume of existing home sales was somehow correlated with the future of home prices, would that graph predict doom and gloom?

12. Goran_K Follow Befriend (4) 25 threads 1,518 comments Laguna Beach, CA Premium

    19   2:32pm Tue 18 Sep 2012   Share   Quote   Permalink   Like   Dislike   Protected   I don't know about doom and gloom. Doesn't that depend on the perspective? Someone who owns a $900,000 home in Torrance that they bought in 2007 probably would say doom and gloom (if they were really emo). Someone who was frugal about their housing needs, and saved a lot of cash 2000-2010 might say "Happy days".

13. zesta Follow Befriend 1 threads 203 comments

    20   2:36pm Tue 18 Sep 2012   Share   Quote   Permalink   Like   Dislike   We're on a rooGoran_K says I don't know about doom and gloom. Doesn't that depend on the perspective? Someone who owns a $900,000 home in Torrance that they bought in 2007 probably would say doom and gloom (if they were really emo). Someone who was frugal about their housing needs, and saved a lot of cash 2000-2010 might say "Happy days". We're on a roll.. I agree with that too. My point being that not only is "housing demand is at 15 year lows.... and falling" untrue, I'm not sure how one could draw the conclusion that "Speculation nation funded the Spring/Summer jump" from either the number of 2011 home loans or 2011/2012 resale volume.

14. zesta Follow Befriend 1 threads 203 comments

    21   2:37pm Tue 18 Sep 2012   Share   Quote   Permalink   Like   Dislike   Darrell In Phoenix says Dramatically lower housing prices is "gloom and doom"? Huh? Nonsense. Dramatically lower housing prices is bullish optimism and watch the economy accelerate as prices dive down to early 1990's levels. Housing demand was exceptionally low in 2010! SELL SELL SELL!!

15. Goran_K Follow Befriend (4) 25 threads 1,518 comments Laguna Beach, CA Premium

    22   2:38pm Tue 18 Sep 2012   Share   Quote   Permalink   Like   Dislike   Protected   zesta says I'm not sure how one could draw the conclusion that "Speculation nation funded the Spring/Summer jump" from either the number of 2011 home loans or 2011/2012 resale volume. Well you can never be 100% sure. I mean, lots of foreign asian money and Facebook millionaires could have bought all the houses nationally fresh with cash. Or declining purchase mortgage applications, and increasing cash sales could indicate that investors have made their presence felt in the market since mortgages are hard as heck to get now days. I tend to not believe the fantastic, and try to stay grounded with my theories. I'm not an expert in everything, but I'm pretty good at the common sense thing.

16. zesta Follow Befriend 1 threads 203 comments

    23   3:35pm Tue 18 Sep 2012   Share   Quote   Permalink   Like   Dislike   Darrell In Phoenix says Hmmm... Housing Demand was higher in 1994 than it is today. Is housing demand at 18 year lows? Yes. Goog was higher in 2007 than it is today. Is Goog at 5 year lows? "Housing demand was exceptionally low in 2010! SELL SELL SELL!!"

17. zesta Follow Befriend 1 threads 203 comments

    24   3:36pm Tue 18 Sep 2012   Share   Quote   Permalink   Like   Dislike   Goran_K says zesta says I'm not sure how one could draw the conclusion that "Speculation nation funded the Spring/Summer jump" from either the number of 2011 home loans or 2011/2012 resale volume. Well you can never be 100% sure. I mean, lots of foreign asian money and Facebook millionaires could have bought all the houses nationally fresh with cash. Or declining purchase mortgage applications, and increasing cash sales could indicate that investors have made their presence felt in the market since mortgages are hard as heck to get now days. I tend to not believe the fantastic, and try to stay grounded with my theories. I'm not an expert in everything, but I'm pretty good at the common sense thing. Was the spring/summer jump in 2011 or 2012? The article talks about 2011 data.

18. Raw Follow Befriend 10 threads 694 comments

    25   4:10pm Tue 18 Sep 2012   Share   Quote   Permalink   Like   Dislike   Darrell In Phoenix says Darrell In Phoenix says Hmmm... Housing Demand was higher in 1994 than it is today. Is housing demand at 18 year lows? Yes. You have even started talking to yourself. I am very worried about you Darrell, very very worried.

19. Goran_K Follow Befriend (4) 25 threads 1,518 comments Laguna Beach, CA Premium

    26   4:26pm Tue 18 Sep 2012   Share   Quote   Permalink   Like (2)   Dislike   Protected   zesta says Was the spring/summer jump in 2011 or 2012? The article talks about 2011 data. There's a lot more herd mentality now (speculators). Robert Shiller's analysis is what I see in the market today.

20. Call it Crazy Follow Befriend 229 threads 2,777 comments

    27   6:39pm Tue 18 Sep 2012   Share   Quote   Permalink   Like   Dislike   Goran_K says There's a lot more herd mentality now (speculators). Robert Shiller's analysis is what I see in the market today. Yep, I herd that too :)

21. robertoaribas Follow Befriend (23) 55 threads 3,790 comments Scottsdale, AZ robertoaribas's website

    28   7:46pm Tue 18 Sep 2012   Share   Quote   Permalink   Like   Dislike   Goran_K says There's a lot more herd mentality now (speculators). Robert Shiller's analysis is what I see in the market today. Are they speculators, or investors? I'm seeing quite a bit of both in Phoenix... I'd call it honestly (something the trolls on here have a real problem with) about 50% to 50%. I see plenty of flippers on hard money loans and borrowed time but I also see plenty of buy and hold investors.

22. bgamall4 Follow Befriend (14) 751 threads 2,585 comments 63 male Las Vegas, NV bgamall4's website Premium

    29   8:23am Wed 19 Sep 2012   Share   Quote   Permalink   Like   Dislike   Protected   robertoaribas says Are they speculators, or investors? I'm seeing quite a bit of both in Phoenix... I'd call it honestly (something the trolls on here have a real problem with) about 50% to 50%. I see plenty of flippers on hard money loans and borrowed time but I also see plenty of buy and hold investors. But most are either hedge fund types, or flippers. The hedge funds want a bubble and are working with Ben Bernanke with the unlimited QE. They think if people see price appreciation they will buy. It is not sustainable, however, unless they go back to a dollar down.

23. Goran_K Follow Befriend (4) 25 threads 1,518 comments Laguna Beach, CA Premium

    30   8:40am Wed 19 Sep 2012   Share   Quote   Permalink   Like   Dislike   Protected   robertoaribas says Are they speculators, or investors? I'm seeing quite a bit of both in Phoenix... I'd call it honestly (something the trolls on here have a real problem with) about 50% to 50%. I see plenty of flippers on hard money loans and borrowed time but I also see plenty of buy and hold investors. Well, to be accurate, a speculator is just a form of investor, just a form no one wants to be accused of being. I'm sure you're not a speculator Roberto. You seem too intelligent to be part of the herd. :) That being said, I can find no other explanation for prices nominally rising, purchase mortgages declining, and the amount of cash transactions increasing without some form of speculation occurring. Sure it could be Facebook IPO millionaires, or Chinese manufacturing moguls and their families making up the cash transactions, but that seems far more unlikely than "investors" trying to find a place to park their money to get better returns in a ZIRP environment created by the FED.

24. cc0 Follow Befriend 6 threads 115 comments

    31   8:44am Wed 19 Sep 2012   Share   Quote   Permalink   Like   Dislike   Darrell In Phoenix says Is housing demand at 18 year lows? Yes. No. http://www.bloomberg.com/news/2012-09-19/sales-of-u-s-existing-homes-climb-to-a-two-year-high.html Purchases of previously owned houses increased 7.8 percent to a 4.82 million annual rate, the most since May 2010, [...] Another report showed construction began on more single-family homes last month than at any time in the past two years. [...] The median price of an existing home climbed 9.5 percent to $187,400 from $171,200 in August 2011.

25. RentingForHalfTheCost Follow Befriend (8) 38 threads 2,006 comments Pleasanton, CA Premium

    32   8:45am Wed 19 Sep 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   Raw says Darrell In Phoenix says You didn't read the article did you? It says; "Mortgage Lending Slid to 16-Year Low in 2011" Why else do you think prices are falling? Many homes fell by 80% or more. The down payment 5 years ago is all cash now. You don't need a mortgage anymore, which is why mortgage lending is sliding. That is a good thing, Darrell, a very good thing. Couldn't be further from the truth. Remove the free money mortgage and houses would be worth less than half. All cash buyers are there, but they are not the driving force in prices. Why else would the Fed be trying to push interest rates down? The prices are still inflated and subsidized. When the gravy train ends, good luck to everyone. I'll just give my months notice and move to a sweeter place. Put your overpriced home up for sale when the spiral starts. That'll be interesting. Kinda like the Facebook avalanche.

26. Raw Follow Befriend 10 threads 694 comments

    33   8:56am Wed 19 Sep 2012   Share   Quote   Permalink   Like   Dislike   RentingForHalfTheCost says Many homes fell by 80% or more. The down payment 5 years ago is all cash now. You don't need a mortgage anymore, which is why mortgage lending is sliding. That is a good thing, Darrell, a very good thing. Couldn't be further from the truth. Remove the free money mortgage and houses would be worth less than half. All cash buyers are there, but they are not the driving force in prices. Why else would the Fed be trying to push interest rates down? The prices are still inflated and subsidized. When the gravy train ends, good luck to everyone. I'll just give my months notice and move to a sweeter place. Put your overpriced home up for sale when the spiral starts. That'll be interesting. Kinda like the Facebook avalanche. Cash buyers are an indicator of where the smart money is going. The smart money says this is the time to buy. Heed the obvious or be sorry.

27. Goran_K Follow Befriend (4) 25 threads 1,518 comments Laguna Beach, CA Premium

    34   9:03am Wed 19 Sep 2012   Share   Quote   Permalink   Like   Dislike   Protected   Raw says Cash buyers are an indicator of where the smart money is going. The smart money says this is the time to buy. Heed the obvious or be sorry. How many houses are you buying Raw?

28. freak80 Follow Befriend (4) 52 threads 4,416 comments Corning, NY Premium

    35   9:05am Wed 19 Sep 2012   Share   Quote   Permalink   Like   Dislike   Protected   RentingForHalfTheCost says When the gravy train ends, good luck to everyone. Are you suggesting the gravy train will end? What world are you living in? One with sound money or something? ;-)

29. bgamall4 Follow Befriend (14) 751 threads 2,585 comments 63 male Las Vegas, NV bgamall4's website Premium

    36   9:19am Wed 19 Sep 2012   Share   Quote   Permalink   Like   Dislike   Protected   RentingForHalfTheCost says Couldn't be further from the truth. Remove the free money mortgage and houses would be worth less than half. All cash buyers are there, but they are not the driving force in prices. Why else would the Fed be trying to push interest rates down? The prices are still inflated and subsidized. When the gravy train ends, good luck to everyone. Yes, this is a bubble driven by cash.

30. Raw Follow Befriend 10 threads 694 comments

    37   9:21am Wed 19 Sep 2012   Share   Quote   Permalink   Like   Dislike   Goran_K says Raw says Cash buyers are an indicator of where the smart money is going. The smart money says this is the time to buy. Heed the obvious or be sorry. How many houses are you buying Raw? I am running out of cash, so I will pursue getting land which are still a bargain. If you can get me a home in a prime location that is truly a bargain I will find the money.

31. Goran_K Follow Befriend (4) 25 threads 1,518 comments Laguna Beach, CA Premium

    38   9:26am Wed 19 Sep 2012   Share   Quote   Permalink   Like (2)   Dislike   Protected   Raw says I am running out of cash, so I will pursue getting land which are still a bargain. If you can get me a home in a prime location that is truly a bargain I will find the money. Don't you think it's risky to tie up all your money into houses?

32. rooemoore Follow Befriend 41 threads 905 comments Ross, CA

    39   9:26am Wed 19 Sep 2012   Share   Quote   Permalink   Like   Dislike

33. Raw Follow Befriend 10 threads 694 comments

    40   9:30am Wed 19 Sep 2012   Share   Quote   Permalink   Like   Dislike   Goran_K says Raw says I am running out of cash, so I will pursue getting land which are still a bargain. If you can get me a home in a prime location that is truly a bargain I will find the money. Don't you think it's risky to tie up all your money into houses? It is risky, but I am diversified.

34. RentingForHalfTheCost Follow Befriend (8) 38 threads 2,006 comments Pleasanton, CA Premium

    41   9:30am Wed 19 Sep 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   bgamall4 says RentingForHalfTheCost says Couldn't be further from the truth. Remove the free money mortgage and houses would be worth less than half. All cash buyers are there, but they are not the driving force in prices. Why else would the Fed be trying to push interest rates down? The prices are still inflated and subsidized. When the gravy train ends, good luck to everyone. Yes, this is a bubble driven by cash. Gary Anderson strategicdefaultbooks.com Simply not true. This is a bubble driven by free money. The cash is buying the below market priced housing. The free money is putting pressure on the prices to stay stable or rise. Cash is much smarter than free.

35. RentingForHalfTheCost Follow Befriend (8) 38 threads 2,006 comments Pleasanton, CA Premium

    42   9:31am Wed 19 Sep 2012   Share   Quote   Permalink   Like (3)   Dislike   Protected   Raw says Goran_K says Raw says I am running out of cash, so I will pursue getting land which are still a bargain. If you can get me a home in a prime location that is truly a bargain I will find the money. Don't you think it's risky to tie up all your money into houses? It is risky, but I am diversified. Yah, you have a red house, a blue house, a green one, some Home Depot stock, and you are waiting for the dividends to start from the home builders. Completely diversified. ;)

36. RentingForHalfTheCost Follow Befriend (8) 38 threads 2,006 comments Pleasanton, CA Premium

    43   9:34am Wed 19 Sep 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   freak80 says RentingForHalfTheCost says When the gravy train ends, good luck to everyone. Are you suggesting the gravy train will end? What world are you living in? One with sound money or something? ;-) Absolutely, what I am suggesting. It is how we solve the debt problem in this country. We either solve it now, or it will find its own solution. Most likely war. I hope not, but greed normally leads to that. We really haven't gotten any brighter. We think we are, but greed is more of a problem now than ever before. Housing is a great place to see it unfold.

37. Raw Follow Befriend 10 threads 694 comments

    44   9:37am Wed 19 Sep 2012   Share   Quote   Permalink   Like   Dislike   RentingForHalfTheCost says Yah, you have a red house, a blue house, a green one, some Home Depot stock, and you are waiting for the dividends to start from the home builders. Completely diversified. ;) LOL. You are funny. You forgot Apple, the greatest company ever in the history of mankind.

38. RentingForHalfTheCost Follow Befriend (8) 38 threads 2,006 comments Pleasanton, CA Premium

    45   2:44pm Wed 19 Sep 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   Raw says You forgot Apple, the greatest company ever in the history of mankind. It is by far the greatest company named after a fruit. I give you that. However, I would beg to argue that the only reason people are happy there is the financial reward. I know many engineers that are not happy there, but stay because of the shares. I think the greatest company should go to the company that figures out how to make people happy without bribing them with stock. :)

39. bgamall4 Follow Befriend (14) 751 threads 2,585 comments 63 male Las Vegas, NV bgamall4's website Premium

    46   7:55pm Wed 19 Sep 2012   Share   Quote   Permalink   Like   Dislike   Protected   RentingForHalfTheCost says Simply not true. This is a bubble driven by free money. The cash is buying the below market priced housing. The free money is putting pressure on the prices to stay stable or rise. Cash is much smarter than free. Free money is cash. I said it was causing a mini bubble. You are saying I disagree with you but I don't think I am.

40. RentingForHalfTheCost Follow Befriend (8) 38 threads 2,006 comments Pleasanton, CA Premium

    47   4:24pm Thu 20 Sep 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   bgamall4 says RentingForHalfTheCost says Simply not true. This is a bubble driven by free money. The cash is buying the below market priced housing. The free money is putting pressure on the prices to stay stable or rise. Cash is much smarter than free. Free money is cash. I said it was causing a mini bubble. You are saying I disagree with you but I don't think I am. Gary Anderson strategicdefaultbooks.com Oh, I thought you were saying the cash only buyers were causing the bubble. My bad. Free money is great when you are the receiver, but when you want to live within your means and not feed into the debt problem it sucks. I witness so many people living on borrowed money that they will never repay. I knew it when it started happening in 2004 and it is still happening. Tight lending standards my ass. I just sold a car and the buyer got an auto loan at 2%. Removing inflation and the credit union is paying the person to take the loan. How can that be healthy. If you followed the money trail there has to be kickbacks from the gov't and forgiveness for bad debt to make that auto loan profitable for them. Stupid stuff.

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